*Pi**ed off
Handling problems with the correct mindset can improve the effectiveness of good process and good training in your dealership.
By the time this column is published, our federal election will be over and I suspect there may be some surprises for many politicians. The main reason is that I see signs of consumers being fed up — not just with what’s going on in the political arena, but also with many of their experiences as customers.
One of the main themes of this election is turning out to be how politicians of all stripes deal with “bad news”. It understandably throws them off balance and leads to opening the bag to scatter promises like a farmer scatters seed. No wonder consumers are skeptical, losing trust and just plain tired of all the apologies, excuses and hot air. They’re in a bad mood.
Are consumers less satisfied in general?
There is an interesting U.S. study conducted on an on-going basis by the American Customer Satisfaction Index (ACSI). The ACSI is a not-for-profit organization that was started in the United States in 1994 by researchers at the University of Michigan, in conjunction with the American Society for Quality in Milwaukee, Wisconsin, and CFI Group in Ann Arbor, Michigan. It measures customer satisfaction levels across more than 70 different industries in the U.S., updating results on a quarterly basis. Their proprietary methodology has enabled them to standardise scores across industries to allow valid comparisons.
I reviewed their latest results for Q2, 2019, and if you compare the most recent results across 45 industries with those for the same period a year ago (some of the 70 have not yet been updated for 2019), here’s what you will see for industries in general, and for autos (“automobiles and light vehicles”):
The ACSI study also shows that in 2019, six out of nine luxury nameplates saw their scores decline. Two brands increased (Infiniti and Mercedes-Benz) and BMW remained the same. Unfortunately we don’t have a similar study in Canada, though I believe we’d see the same trends. ACSI’s a very objective and independent metric, not influenced or dominated by any one particular industry. We may see rising CSI scores in the auto retail business, but I believe we are focusing too much on in-bred metrics that have developed their own momentum after so many years.
When consumers are grumpy to begin with, problems are magnified; the mood is not good and when this happens, consumers will take out their frustrations in everyday life. Your dealership probably sees its fair share of having to deliver bad news: the car the customer wanted hasn’t left the factory yet; financing has not been approved; the repairs have not been completed; the parts won’t be delivered for three weeks; we found additional service work required, and so on.
Unfortunately, dealerships don’t have the teams of spin-doctors that politicians have to help you smooth over the bumps when something goes wrong. You and your staff are on the front lines and have to deal with the problem there and then.
The corporate position is sometimes not that helpful. Toyota Canada’s recent issues with parts availability led to the statement that the problem was caused by a “planned systems transformation to provide an improved overall customer experience.” That statement might be completely true, but in the current climate of scepticism, the irony around the “improved customer experience” probably induced considerable eye-rolling.
A strong brand like Toyota can withstand that, but too many of these incidences chip away at the integrity of the brand or business in the customer’s mind. There is much scientific evidence that bad experiences are more powerful than positive ones in how perceptions and behaviour are formed. Handling problems well can turn a grumpy adversary into a valuable advocate. Correcting mistakes and conveying bad news to a customer is similar: the customer is disappointed or angry and inconvenienced.
In today’s environment, you’re quite likely to see more of this than in the past. Most dealerships know that handling problems well can turn an adversarial customer into an advocate. Research has shown that, at least theoretically, that is true. “Service recovery” is a well-known best-practice in customer-facing enterprises.
The retail business is not a perfect world like manufacturing can be. In a very informative blog on Hiver (a global collaboration software company’s site), there’s a statement that rings true for me and that underlines why retail is different: “Zero defects is attainable in manufacturing, but not in service delivery systems. You add the components at the right places in a standardised process and achieve the desired output — impossible to achieve this feat when you’re dealing with customers.”
While I agree with this, I also think that consistent process, both overall and in terms of service recovery, can definitely lead to fewer problems in a customer-facing environment.
Hiver’s blog refers to a comprehensive study reported in the Journal of Services Marketing, 2007. The authors asked if the service recovery paradox is a “justifiable theory or a smouldering myth.” (They conclude, by the way, that it is a valid theory, with some caveats such as contextual variables, like the severity of the problem.)
There are many articles and texts that prescribe processes for service recovery, but Hiver’s blog caught my attention because it starts out by suggesting that “fostering the right mindset” is a critical part of the process. The key components to this are: don’t make excuses (such as blaming another department or division), and don’t panic (remember that the customer looks to you for support).
Don’t stop being fair — you have to go a step further than just getting back to where you should have been. Remember, you aren’t doing the customer a favour, you’re simply putting things right. And always remind yourself of the lifetime value of the customer.
These points really resonated with me. So often, companies rely entirely on process and internal procedures when problems arise. Problem resolution training also focuses strongly on these aspects. Consistency is very important, but the correct mindset will enhance the effectiveness of good process and good training.
You can’t “teach” a mindset — it is an intangible that is an outcome of the type of person you hire and whether or not it is supported by the culture in your dealership. In practical terms, take a look in the mirror and also make sure your hiring criteria address how prospective employees handle problems.
So, hang in there while all this political nonsense (in Canada, south of the border, and across the pond) works itself out. But be aware that consumer sentiment is less likely to work in your favour for the next little while!
